The trial balance of Lexington Inn at December 31, 2008, and the data needed for the month-end adjustments follow.

Adjustment data at December 31:

a. Prepaid insurance still in force, \(\$ 600\).

b. Supplies used during the month, \(\$ 600\).

c. Depreciation for the month, \(\$ 900\).

d. Accrued salary expense, \(\$ 100\).

e. Unearned service revenue still unearned, \(\$ 1,100\).

Requirements 

1. As directed by your instructor, open \(T\)-accounts (or four-column accounts) for the accounts listed in the trial balance, inserting their December 31 unadjusted balances.

2. Journalize the adjusting entries and post to the T-accounts. Key the journal entries and the posted amounts by letter. Show the ending balance of each account. If you are instructed to use four-column accounts, then post to the accounts and write "Balance" in the Item column for the December 31 unadjusted balance, as shown here for the Cash account:

Use the actual date (Dec. 31) for each posted amount.

3. Prepare the adjusted trial balance.

4. How will Lexington Inn use the adjusted trial balance? 

Transcribed Image Text:

Account Title Cash LEXINGTON INN Trial Balance December 31, 2008 Accounts receivable Prepaid insurance Supplies Building Accumulated depreciation Accounts payable Salary payable Unearned service revenue Balance Debit Credit $ 12,200 14,100 3,100 800 412,000 $311,000 1,900 2,300 Paul Revere, capital 115,000 Paul Revere, withdrawals 2,900 Service revenue 17.800 Salary expense 2.100 Insurance expense Depreciation expense Advertising expense Supplies expense Total 800 $448,000 $448,000